Does it make more sense to incorporate a startup in Delaware or New York? Which option is less cumbersome, more flexible for the future, and more cost effective?

Great question! As you can see from all of the responses you’ve already received, there is no simple answer to your question. Incorporating where you live and run your business makes sense because, logistically, it’s just easier, especially if your business is in its infancy. However, there may be real tangible benefits to incorporating in another state.

Delaware, for example, is very friendly to corporations and a well-known tax haven. In fact, generally all you need to incorporate in Delaware is a business name and a registered agent; no need to identify owners or officers. Delaware also does not tax income earned from intangible assets such as trademarks and leases; so many business park such assets in their Delaware corporations to reduce their tax obligations. In addition, Delaware has a Chancery Court which is exclusively dedicated to resolving business disputes. Check out my other thoughts on incorporating in Delaware here and here.

As Alistair indicates in his answer, New York is actively adopting policy initiatives to make NYC a more friendly place for startups. Indeed, you’d be in the company by incorporating there. My company LawTrades has sourced some of the best startup lawyers in NYC that offer flat-fee arrangements for stuff like incorporation, raising money, contract review and more. Our lawyers are selected from some of the country’s most competitive law schools. In addition, since you are thinking about moving to California, we also have lawyers with experience forming corporations on the West Coast, as well as the other states in which you are thinking of doing business. We are basically a one-stop platform for all the legal services you’ll need for your startup business.

Stop by today for a free consultation and a no-obligation price quote!